Financial Statements 2023

2. Notes to the IFRS Consolidated Financial Statements 2.4 Airbus Performance

The following table shows a reconciliation from the theoretical income tax (expense) using the Dutch corporate tax rate to the reported income tax (expense):

2023

(In € million)

2022

Profit before income taxes

4,769

5,075

Corporate income tax rate

25.8% 25.8%

Expected (expense) for income taxes

(1,230)

(1,309)

Effects from tax rate differentials / Change of tax rate

(45)

39

Capital gains and losses on disposals / mergers

20

0

Income from investment and associates

57

29

Tax credit

48

41

(1)

Change in valuation allowances

(67)

53

Tax contingencies

76

156

Other non ‑ deductible expenses and tax ‑ free income

(15)

52

Reported tax (expense)

(1,156)

(939)

Reassessments of the recoverability of deferred tax assets based on future taxable profits. (1)

The income tax expense amounts to €-1,156 million (2022: €-939 million) and corresponds to an effective income tax rate of 24.2%. This includes impacts from the tax ‑ free revaluation of certain equity investments under IFRS 9, tax risk updates and deferred tax assets impairments. As a result of a corporate reorganisation in Germany, a prior year deferred tax asset impairment was partially reversed for €237 million, out of which €160 million recorded in the income statement and €77 million in other comprehensive income. As the Company controls the timing of the reversal of temporary differences associated with its subsidiaries (usually referred to as “outside basis differences”) arising from yet undistributed profits and changes in foreign exchange rates, it does not recognise a deferred tax liability. For temporary

differences arising from investments in associates the Company recognises deferred tax liabilities. The rate used reflects the assumptions that these differences will be recovered from dividend distribution unless a management resolution for the divestment of the investment exists at the closing date. For joint ventures, the Company assesses its ability to control the distribution of dividends based on existing shareholder agreements and recognises deferred tax liabilities accordingly. As of 31 December 2023, the aggregate amount of temporary differences associated with investments in subsidiaries, branches and associates and interests in joint arrangements, for which deferred tax liabilities have not been recognised, amounts to €230 million.

34

Airbus

Financial Statements 2023